Shubham Sawarkar
On Sunday (Aug. 21, 2022), the Ministry of Finance made it clear that it was not planning to charge fees on UPI transactions.
The Reserve Bank of India (RBI) released a discussion paper on levying fees in payment systems including Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), UPI (Unified Payments Interface), and other payment instruments like debit cards and credit cards four days prior to the statement, according to The Indian Express.
Banks currently charge fees for NEFT, RTGS, and other payment systems like IMPS. However, UPI transactions are free. There have been worries that UPI may soon be subject to fees ever since the central bank addressed it in the discussion document.
The Indian Express said that the central bank has underlined that it was merely looking for feedback and not giving orders to impose fees on UPI transactions.
According to RBI officials who are familiar with the discussion paper, the plan was to help businesses who provide UPI services in recovering their operational costs by imposing a fee that might be as little as one paisa or two paise per transaction. (via The Hindu)
However, the Ministry of Finance made it clear on Sunday (Aug. 21, 2022) that there must be other ways to fund the cost recovery.
The Ministry stated in a series of tweets that “UPI is a digital public good with immense convenience for the public and productivity gains for the economy.”
It added that the Union government had provided financial support to the digital payment ecosystem in 2021 and has announced the same assistance this year to “encourage further adoption of digital payments and promotion of payment platforms that are economical and user-friendly.”
UPI is one of the most popular methods for daily digital transactions. The National Payments Council of India (NPCI) reports that in June of this year, UPI transactions surpassed 10,62,991.76 crore.
